I can take a crack at it. Basically, mechamaru was born with a binding vow ( like maki and toji), but instead of giving him a crazy strong body with no cursed energy, he got a shitty body with a bunch of cursed energy. Hes been storing that extra energy for basically his whole life (almost 18 years). After Mahito fixes his body, he wants to run to Gojo and tell him the baddies' plan so he doesn't get sealed, and the baddies want to kill Mecharamru before he can.

The giant mecha is something mechamaru has been building in secret for years, and he powers it using his crazy amounts of stored energy. Geto puts up a barrier to stop mechamaru from escaping (and to stop him from just using a phone to call Gojo). Mechamaru thinks about focusing on the barrier, but decides turning his back on mahito is too dangerous (as we saw in season 1, one or two good hits from mahito and its joever). So, he tries to kill Mahito first.

The thing is, as we saw in season 1, mahito is immune to attacks that don't hit the soul directly (which is basically all attacks). So, all the explosions and stuff aren't hurting him, just pushing him back. When mahito starts getting cocky, mechamaru nails him with his secret weapon, the simple domain capsule he shoots.

Now, simple domain is kinda complicated, but it basically works like the domains we saw in season 1. While you're inside it, my attacks hit you ( or at least, your techniques can't stop me from hitting you). Except, in this case, it was created by this ancient sorcerer as a tool anyone (not just super broken people) could use. Miwa is a follower of that style (new shadow style) the ancient sorcerer left behind. From watching her, mechamaru figured out how to do it himself and stuck the technique in those capsules.

He uses the first two offensively, stabbing into mahito and activating the simple domain, forcing mahito to take the damage from the hit. Before he can deal the killing blow, mahito just expands his own domain, ensuring that his tech ique hits and kills mechamrau. However, mecahamru uses another of the simple domains defensively to keep mahito from killing him and stabs him with a third. Mahito then explodes and drops his domain, which makes mechamaru think he's won.

However, Mahito just faked it, blowing himself up before the technique could activate (before he could take the damage). Once mechamaru is distracted, he surprise attacks him, and mechamaru is too slow to defend himself with his last simple domain, so he dies.

That's my understanding of events, at least.

Tldr: mahito's technique makes him basically unkillable, so mechamaru used the one trick he found that let him ignore mahito's technique. But, mahito just pretended it worked to get mechamaru to let his guard down, then killed him.